B&D profit rose to $6.8 million in 4th quarter

February 20, 1991|By Kim Clark

Though sales of its power tools and appliances in the United States have slowed, the Black & Decker Corp. said yesterday that its profits have started improving.

Buoyed by strong sales in Germany and improvements to its recently acquired lock division, the big Towson-based hardware company said its profits rose to $6.8 million for the last three months of 1990, an improvement over the $3.2 million loss in the same quarter of 1989.

The fourth quarter, which is traditionally the most important for the maker of tools and appliances ranging from power drills to coffeemakers, was also hurt by continuing economic chaos in Brazil, where the government's severe anti-inflationary measures have slashed sales, the company said.

The company had said it would reduce its operations in Brazil, which include an electronics equipment factory, to stanch the losses.

Company Chairman Nolan D. Archibald also said in a press statement that Black & Decker had increased its provision for doubtful accounts as a defensive move in light of the U.S. recession's impact on some retailers.

Cliff Ransom, an investment analyst who follows the company for Baltimore-based Ferris Baker Watts, said the results were "in line with reality" and were about as good as could be expected.

"They are doing OK in a very difficult retail environment," he said, noting that the number of power tools and appliances the companysold in many markets was actually down for the year, but revenues improved because of currency gains and higher prices.

Black & Decker had warned investors earlier that the quarter wouldn't be as good as they had originally hoped.

But the results did not dampen the company's stock price yesterday. It closed at $13.25 on the New York Stock Exchange, an increase of 62.5 cents.

Black & Decker has been selling off businesses it acquired when itbought the Connecticut-based Emhart Corp. in 1989 for nearly $4 billion.

The company has paid down $800 million of its $1 billion near-term acquisition debt so far, and expects to be able to make all of its payments, Mr. Archibald said.